If a Crave franchisee's Franchise Agreement is terminated, is this considered a curable or non-curable default under the Multi Unit Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
franchise and related agreements. You should read these provisions in the agreements attached to this disclosure document.**
| Provision | Section in Multi- | Summary | |
|---|---|---|---|
| Unit Development Agreement | |||
| h. “Cause” defined – non- curable defaults | 9 | Failure to meet your minimum performance schedule; failure to comply with applicable laws; if all of your Franchised Businesses stop operating; unauthorized transfer; you make a material misrepresentation to us; conviction by you or your owners of an indictable offense; |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 50–56)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the termination of a Franchise Agreement is considered a non-curable default under the Multi-Unit Development Agreement. Specifically, if a Franchise Agreement with Crave is terminated according to its terms, it triggers a cross-default provision within the Multi-Unit Development Agreement.
This means that if a franchisee fails to meet the obligations outlined in their Franchise Agreement, leading to its termination, this event automatically constitutes a default under any existing Multi-Unit Development Agreement they may have with Crave. This is a significant point for multi-unit developers, as the failure of even one franchise location could jeopardize their entire development agreement.
This cross-default provision is a protective measure for Crave, ensuring that multi-unit developers maintain a high standard of compliance across all their franchise locations. It also streamlines the process for Crave to address issues with underperforming or non-compliant franchisees who have multiple locations under development. Prospective multi-unit developers should carefully review the terms of the Franchise Agreement and understand the potential consequences of non-compliance, as the termination of one agreement can have a cascading effect on their entire investment with Crave.